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Condensed Interim Financial Statements For the nine months ended 30 November 2023

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Consolidated Statement of Profit or Loss

Balance Sheet

Consolidated Statement of Other Comprehensive Income

Balance Sheet

Balance Sheet

Balance Sheet

Balance Sheet

Review of performance of the Group

Consolidated statement of Comprehensive Income

Third quarter ended 30 November 2023 (“3Q FY2024”) vs Third quarter ended 30 November 2022 (“3Q FY2023”)

Revenue
The Group recorded revenue of RM38.7 million in 3Q FY2024, representing a decrease of 11.0% or RM4.8 million, over the revenue of RM43.5 million in 3Q FY2023. The decrease was primarily attributable to the closure of the Kuala Lumpur International Airport (“KLIA”) outlet due to the termination of its tenancy at KLIA in April 2023.

Changes in inventories
Changes in inventories comprised the difference in the value of inventories at the beginning and at the end of the financial period under review. In 3Q FY2024, the value of the closing inventories was lower than the value of the opening inventories by RM3.6 million. In 3Q FY2023, the value of the closing inventories was higher by RM12.6 million. This resulted in a negative variance of RM16.2 million for 3Q FY2024 vis-à-vis 3Q FY2023, which was mainly due to lower purchases and consumption of inventories as compared with the corresponding quarter of the previous financial year.

Inventories purchased and material consumed
Inventories purchased and material consumed decreased by 43.6% or RM17.3 million, from RM39.6 million in 3Q FY2023 to RM22.3 million in 3Q FY2024. This was mainly due to lower purchases and consumption of inventories in the current quarter due to subdued consumer demand and closure of the airport outlet as mentioned above.

Other Income
Other income decreased by RM1.1 million or 34.2% from RM3.4 million in 3Q FY2023 to RM2.3 million in 3Q FY2024, mainly attributable to the lower net reversal of inventories written down by RM0.7 million and absence of reversal of over accrual of expenses amounting RM0.7 million which was recorded as other income in 3QFY2023. The adverse impact was partially offset by higher interest income of RM0.4 million in the current reporting quarter.

Rental of premises
The rental of premises expenses showed a decrease of RM1.6 million from RM1.7 million in 3Q FY2023 to RM0.1 million in 3Q FY2024. The reduction in rental expenses was primarily a result of the cessation of expenses associated with the closed of the airport outlet operations, as mentioned above.

Employee benefits expenses
Employee benefits expenses increased by 26.6% or RM0.9million, from RM3.4 million in 3Q FY2023 to RM4.3 million in 3Q FY2024. The increase was mainly due to increase in overall payroll headcount as well as salary upward revision as compared with the corresponding quarter of the previous financial year.

Unrealised foreign exchange gain
Unrealised foreign exchange gain in 3Q FY2024 of RM1.3 million was higher by RM1.1 million as compared to RM0.2 million gain in 3Q FY2023. This was mainly due to the currency translation to Ringgit Malaysia of the Group’s deposits and bank balance in financial institutions of SGD21.5 million and USD2.2 million as at 30 November 2023, whereby Ringgit Malaysia had weakened against Singapore Dollar by approximately 1.7% from RM3.43 as at 31 August 2023 to RM3.49 as at 30 November 2023 and US Dollar by approximately 0.3% from RM4.65 as at 31 August 2023 to RM4.66 as at 30 November 2023.

Other operating expenses
The Group incurred lower other operating expenses in 3Q FY2024 by RM1.3 million or 31.4% as compared to RM4.3 million in 3Q FY2023, mainly due to the absence of GST related expenses of RM1.2 million in the preceding year’s corresponding quarter as well as lower general operating expenses incurred during the quarter under review.

Profit before income tax
The Group reported a profit before income tax of RM3.3 million for 3Q FY2024, which was RM1.1 million lower than profit before income tax of RM4.4 million recorded in 3Q FY2023. The lower profit in 3Q FY2024 as compared to 3Q FY2023 was mainly due to lower revenue achieved, lower other operating income and higher employee benefit expenses as mentioned above. However, the adverse effect was partially offset by lower rental expenses of premises and other operating expenses as well as higher net foreign exchange gain in the current quarter under review as mentioned above.

 

Nine months ended 30 November 2023 (“9M FY2024”) vs Nine months ended 30 November 2022 (“9M FY2023”)

The Group recorded revenue for 9M FY2024 of RM108.7 million, representing an increase of 5.9% or RM6.1 million, over the revenue of RM102.6 million in 9M FY2023.

The Group reported a profit before income tax of RM10.9 million for 9M FY2024, representing an increase of 20.5% or RM1.8 million as compared to a profit before income tax of RM9.1 million recorded in 6M FY2023. The increase in profit was mainly contributed by higher revenue achieved coupled with higher net foreign exchange gain of RM1.9 million and lower rental expenses of RM3.0 million as well as lower other operating expenses of RM2.7 million. However, the positive effect was partially offset by lower other income of RM3.6 million and higher employee benefit expenses of RM1.7 million.

 

Consolidated Statement of Financial Position

Property, plant and equipment
The decrease in net book value of the property, plant and equipment by RM1.9 million was mainly due to the depreciation charge of RM2.5 million, partially offset by acquisition of assets amounting to RM0.6 million during the nine month of FY2024.

Right-of-use assets
The increase in right-of-use assets by RM5.0 million was mainly due to renewal and addition of a new lease totalling RM11.6 million, partially offset by depreciation charge of RM6.5 million during the nine month of FY2024.

Trade receivables and other receivables
The decrease in trade and other receivables by RM7.5 million was mainly due to the offset of rental due against the balance receivable from BWSB in relation to the leases for outlets in the Zon Johor Bahru as explained under Note 6.1 above.

Prepayments (current and non-current)
Current prepayments decreased by RM2.4 million, from RM5.2 million as at 28 February 2023 to RM2.8 million as at 30 November 2023 which was mainly due to the reclassification of rental paid in advance of RM3.6 million as a new lease coupled with the offset by the down payment of building construction costs for one of the Group’s retail outlets amounting to RM1.3 million.
As at 30 November 2023 and 28 February 2023, non-current prepayment of RM4.0 million was in relation to development return paid to the State Government and City Council.

Inventories
The decrease in inventories of RM5.9 million was mainly due to lower purchases of inventories in 3Q FY2024 and improved inventories.

Trade and other payables
The decrease in trade and other payables of RM5.9 million was mainly due to lower purchases in 3QFY2024. Borrowings (current and non-current) Total borrowings decreased by RM4.0 million mainly due to repayment of trade facilities of RM4.0 million.

Lease liabilities (current and non-current)
The increase of lease liabilities of RM4.9 million was mainly due to the renewal and addition of a new lease totalling RM8.0 million and accretion of interest of RM5.3 million charged during the nine months of FY2024. The increases were partially offset by the payments of lease liabilities of RM8.4 million in the same period.

 

Consolidated Statement of Cashflow
The net cash flow generated by the Group from operating activities for 3Q FY2024 was RM11.3 million as compared to the RM6.8 million used in 3Q FY2023. This was mainly due to higher cash flow generated from operations mainly due to reduction in purchases of inventories as well as decrease in receivable recorded in the current quarter under review.

The net cash flow generated from investing activities in 3Q FY2024 was higher than 3Q FY2023 by RM0.3 million mainly contributed by higher interest income received in the current quarter under review.

The net cash flows used in financing activities was RM7.1 million as compared to RM0.3 million in 3Q FY2023 mainly due to higher payment of lease liabilities of RM2.6 million as well as dividend paid out of RM7.3 million. Fixed deposits of RM3.1 million previously pledged as collateral to secure a banking facilities has been released and recorded in the current quarter under review.

    18. Where a forecast, or a prospect statement, has been previously disclosed to shareholders, any variance between it and actual results
    Not applicable.

    19. A commentary at the date of the announcement of the significant trends and competitive conditions of the industry in which the Group operates and any known factors or events that may affect the Group in the next operating period and the next 12 months
    The Malaysian economy expanded moderately in the third quarter of 2023 by 3.3% (2Q 2023: 2.9%), growth was anchored by resilient domestic demand. On a quarter on-quarter seasonally adjusted basis, the economy grew by 2.6% (2Q 2023: 1.5%). Overall, the Malaysian economy expanded by 3.9% in the first three quarters of 20231.

    Despite positive indications of an ongoing economic recovery, the Group anticipates that the retail business environment in which it operates will continue to be challenging. This stems from the escalating product and operating costs due to the weakening of the Ringgit Malaysia against major foreign currencies, along with the added strain of inflationary pressures and a cautious approach to consumer spending. Hence, the Group will persist in its endeavours to improve operational efficiency and effectiveness. This includes implementing rigorous cost control measures while simultaneously devising strategies to adapt and navigate the constantly evolving business landscape. The overarching goal is to ensure that the Group’s core businesses remain resilient and robust in the face of these challenges in the next twelve months.

    [Note 1 : Source from Bank Negara Malaysia – Economic and financial developments in Malaysia in the third quarter of 2023]